Innovating Through Data: The Best Way to Predict the Future is to Invent It

Organizations that don’t prioritize innovation tend to get left behind. But how do organizations determine when, where, or how to innovate? While assessing employee sentiment is a great first choice, another route often lies in analyzing the data.

“Which type of data?” you may be wondering. In the digital economy, there’s so much data being collected that the list could go on and on. In fact, these large data sets are becoming a core asset in the economy, fostering new industries, processes, and products – creating significant competitive advantages.

In this blog, we’ll be exploring why getting more familiar with your organization’s financial data is critical when driving the success of your business.

Doing more with less

No matter the organization, understanding where to reduce costs and direct spending can be quite valuable. But getting to that financial view is the hard part. Every day, businesses receive numerous amounts of fluctuating financial data, and it’s becoming harder to decipher let alone determine where exactly to innovate.

For example, a growing pressure for enterprises to solve is creating more sustainable business practices. Is it as simple as reducing business travel to achieve lower levels carbon emissions? No. An innovative solution would achieve both the desired business outcome and maximize profit. Here are some questions that take both into consideration:

• Are we working with sustainable suppliers and vendors?
• How did business travel effect revenue?
• Is there a closer, more sustainable meeting location?
• How does remote work impact sustainability and profit goals?

While these questions seem straight forward, they require a deeper level of thinking. This is where the power of analytics come in. “Analytics are really great at finding these linkages or hidden patterns we may not easily observe by mining through a ton of data,” said Professor Lynn Wu in a podcast with Wharton. Although if you have to pull together spending data across multiple systems, this may be harder to achieve in real-time.

Forecasting accurate, financial trends

Comparing data that isn’t standard or unified is extremely complex when the goal is to tie it back to higher-level objectives. That’s why it’s important to ensure all your financial data is together, in one place, before looking for more widespread financial trends. When the data comes from decentralized systems, they often roll up to the general ledger (GL) in an aggregated format before being posted as journal entries. This typically leaves the GL with a high-level view of a few large T&E categories—like airfare, hotels, meals, and mileage – depriving finance teams the context and detail needed to identify innovations. Automated spend management systems centralize the travel, expense, and invoice data, allowing finance teams to leverage reporting tools and technologies like artificial intelligence (AI) to analyze the transactional data in detail; manipulate it accordingly and identify larger trends, such as process and cash flow inefficiencies, budget overages, and even fraud. Having the right information, at the right time, helps you drive better business decisions, so the bottom line isn’t sacrificed later.

Why data and reporting is critical to business success

Our customers tell us that data is the blood of their organizations – it helps them analyze, control, and make decisions critical to success. Without it, our customers are unable to see where they have been, where they are, and where they are going.

A strong reporting program not only includes analyzing prior and current performance, but also marrying employee spend data with corporate goals as it pertains directly to finances. Take these measurements as an example: reporting spend by category is necessary for the profit and loss statements or balance sheets; while non-financial, quantitative measurements – payment cycle times, carbon footprints, and employee sentiment – are necessary to keep the business running efficiently. You can then use industry benchmarks to compare against competitors and year-over-year (YoY) indicators to weigh your business’ success:

• Industry benchmarks: Compare your process workflows and expense levels to industry averages; high spend categories, airfare vendors, ground transportation mileage, hotel, and meal spend.
• Leading indicators: Typically non-financial, tell us how a business is performing and gives us insight into future performance; travel trends, payment to contract terms, pre-approved purchases.
• Lagging indicators: Typically financial; a look at the past performance or what has been spent. Used to identify trending, as well as including YoY measurements of spending or revenues to identify organizational trends.

Consistently being able to provide this level of data and reporting helps managers and executives measure success so they can discover more areas to innovate.

Innovate spend management with SAP Concur solutions

If you can’t see your business’ total spend in time to make quick, effective decisions, it’s time to upgrade. It’s not simply enough to have access to your data, you must take it a step further to harness the true power. Unfortunately, the process of gathering and maintaining data is often manual, outdated, and fraught with potential inconsistencies and errors – not to mention the lengthy amount of time spent.

Thankfully there’s a better way, and that’s where we come in. SAP Concur solutions allow you to collaborate with experts and tailor actionable data, so your organization can gain visibility into its KPIs and drive business forward.

Start building a reputable reporting strategy today, visit our Consultative Intelligence solutions website